Justia Insurance Law Opinion Summaries

A lightning strike in October 2019 caused a destructive fire at a large mansion in southern Illinois owned by Wesley Gibson. Gibson had acquired the property nearly 30 years earlier as a family vacation home and, over time, extensively renovated it and filled it with valuable furniture, antiques, and artwork. Eventually, he transformed the mansion and surrounding properties into a commercial lodging and events venue, hosting weddings, corporate retreats, and other gatherings. Gibson’s family continued to use the mansion for about 70 nights per year, but the property’s primary use became commercial, as evidenced by tax filings and significant rental income.Following the fire, Gibson filed a claim with Chubb National Insurance Company under his homeowner’s policy, which provided $8.75 million for the dwelling and $3.5 million for its contents. Chubb paid the dwelling coverage in full but limited payment for the contents to $25,000, citing a business property exclusion in the policy that capped coverage for property used in business at that amount. Gibson sued Chubb in the United States District Court for the Northern District of Illinois for breach of contract and violations of Illinois insurance and consumer-fraud statutes. On cross-motions for summary judgment, the district judge found that the majority of the contents were used for business purposes and subject to the $25,000 limit, granting partial summary judgment to Chubb. The judge allowed Gibson’s claim to proceed only for certain items kept in areas not accessible to guests. After settling remaining issues, final judgment was entered.The United States Court of Appeals for the Seventh Circuit affirmed. The court held that under the terms of the policy and Illinois law, Chubb properly classified most of the mansion’s contents as business property and was only obligated to pay the $25,000 sublimit. The court also affirmed summary judgment for Chubb on the statutory claims. View "Gibson v Chubb National Insurance Company" on Justia Law

A married couple insured their vehicles under a Maryland automobile insurance policy with liability limits of $300,000 per person and $300,000 per occurrence. During an accident, the wife negligently drove one of the insured vehicles, resulting in the death of her husband, who was a passenger. Their four adult children, who did not reside in the household, filed wrongful death claims against their mother under Maryland’s wrongful death statute, seeking damages from the insurer.After the children made their claims, the insurance company invoked the policy’s household exclusion provision. That exclusion limited coverage for “bodily injury to any insured, or to any relative of an insured residing in his household” to the statutory minimum of $30,000. The insurer argued that the children’s claims, though brought under the wrongful death statute, were based on the “bodily injury” (death) of an insured and thus subject to the exclusion’s limit.The Circuit Court for Montgomery County granted declaratory judgment in favor of the insurance company, holding that the children’s claims were derivative of their father’s bodily injury, and that coverage was properly limited by the household exclusion. The Appellate Court of Maryland affirmed, relying on the plain language of the policy and prior Maryland case law, including Costello v. Nationwide Mutual Insurance Co., Daley v. United Services Automobile Ass’n, and Valliere v. Allstate Insurance Co., concluding that the household exclusion applied to the adult children’s claims.The Supreme Court of Maryland affirmed the judgment of the Appellate Court. It held that, under the unambiguous language of the policy, the household exclusion applies to limit the insurer’s liability for damages claimed by non-resident adult children under the wrongful death statute when the claim is based on the death of an insured. The Court concluded that the policy’s use of “bodily injury” as the triggering event controls, and the household exclusion limits recovery to $30,000. View "Murphy v. Gov't Employees Insurance Co." on Justia Law

A roofing contractor was sued in Illinois state court by the estates of two individuals who died when a building façade collapsed. The estates alleged that the contractor had negligently performed repairs on the building after it was damaged by a windstorm in August 2020. The repairs were completed by December 2020, and the fatal collapse occurred in April 2022. The contractor sought defense and indemnification from its commercial general liability insurer under a policy that began on February 8, 2022. The insurance policy included a “Prior Work Exclusion” that barred coverage for claims arising from work completed before the policy’s inception date.The insurer filed suit in the United States District Court for the Northern District of Illinois seeking a declaratory judgment that it had no duty to defend or indemnify the contractor in the underlying state lawsuit. The contractor counterclaimed for breach of contract and argued that the exclusion rendered coverage illusory. Both parties moved for judgment on the pleadings. The district court granted judgment to the insurer, holding that the exclusion applied because the work at issue was completed before the policy period and that the exclusion did not render the coverage illusory, as some coverage for completed operations remained.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that, under Illinois law, the Prior Work Exclusion clearly barred coverage for claims arising from work completed prior to February 8, 2022. The court further held that the exclusion did not make completed-operations coverage illusory because the policy still provided coverage for work completed during the policy period. The judgment in favor of the insurer was affirmed. View "Nautilus Insurance Company v Bee Quality Inc." on Justia Law

The case concerns an Alabama resident who was injured by an uninsured motorist while riding his motorcycle. At the time, he held two separate insurance policies: a standard auto insurance policy from GEICO covering his motorcycle, and a specialty policy from Essentia Insurance Company covering his antique truck. The GEICO policy provided uninsured motorist coverage as required by Alabama law, and the insured collected $25,000 under it. Essentia’s policy, which covered only the antique vehicle, excluded uninsured motorist coverage for accidents involving vehicles other than the covered antique truck. The policy also required the insured to maintain a separate insurance policy that satisfied Alabama’s minimum coverage requirements.After Essentia denied his claim for uninsured motorist coverage, the insured brought suit in the United States District Court for the Middle District of Alabama. Essentia moved for summary judgment, arguing that its specialty policy’s coverage exclusion was valid because the insured had other coverage meeting Alabama’s requirements. The district court denied Essentia’s motion in part, holding Essentia liable for uninsured motorist benefits, but limited the liability to the statutory minimum of $25,000, and entered judgment accordingly. Essentia appealed.The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s summary judgment de novo and reversed. The Eleventh Circuit held that Alabama law permits insurers to fulfill mandatory coverage requirements through multiple policies, and that Essentia’s exclusion is enforceable so long as the insured has other coverage meeting statutory requirements. The court remanded the case for further proceedings consistent with its opinion. View "Clayton v. Essentia Insurance Company" on Justia Law

A commercial truck driver was injured in an accident while operating a tractor-trailer in Missouri. The tractor was registered in Michigan and titled to a limited liability company (LLC) solely owned by the plaintiff, while the trailer was owned by a different LLC. Under a lease agreement, the plaintiff’s LLC leased the tractor to the other LLC, and the plaintiff exclusively operated the tractor. Insurance coverage for the tractor was provided by a policy that excluded personal protection insurance (PIP) when the vehicle was used to transport cargo, and the other LLC’s insurance did not cover PIP for the tractor. The plaintiff, who lived with his parents in Michigan, was not a named insured on his father’s auto policy, nor was the tractor listed as a covered vehicle.After the accident, the plaintiff sued several insurers, arguing that one of them should provide PIP benefits under Michigan’s no-fault act. The Wayne Circuit Court denied summary disposition to one insurer and dismissed others from the case. On appeal, the Michigan Court of Appeals affirmed, finding insufficient evidence to classify the plaintiff as the tractor’s owner or registrant. It ruled that the plaintiff’s claim for PIP benefits was not barred and that his father’s insurer was the highest priority insurer.The Michigan Supreme Court, in reviewing the case, held that the plaintiff was an “owner” of the tractor under MCL 500.3101(3)(l)(i) because he had the right to use the vehicle in a manner consistent with ownership for more than 30 days. The Court found that his exclusive, regular use and control of the tractor, as the sole member and agent of the LLC, satisfied the statutory definition of ownership. Because he failed to maintain the required insurance, the plaintiff was excluded from recovering PIP benefits under MCL 500.3113. The Supreme Court reversed the Court of Appeals and remanded the case to the trial court. View "Abdulla v. Progressive Southeastern Insurance Company" on Justia Law

James Ropicky and Rebecca Leichtfuss discovered significant water damage in their home after a storm in 2018. They held a homeowner’s insurance policy with Cincinnati Insurance Company, which they believed should cover the loss. Cincinnati investigated and determined that rainwater had entered the home over the years through a construction defect—a gap present since the house was built. The insurer also found that this persistent water intrusion allowed fungi to grow, contributing to the damage. Citing policy exclusions for construction defects and fungi, Cincinnati made partial payments to Ropicky, including the policy’s limit for fungi coverage, but denied the full claim.The Waukesha County Circuit Court granted Cincinnati's motion for summary judgment, concluding the insurer had fulfilled its policy obligations. However, the Wisconsin Court of Appeals reversed, finding that factual disputes remained regarding the cause of the damage and the interpretation of policy provisions, including the construction defect exclusion and the fungi exclusion. The appellate court also provided its own reading of the policy language, leading to further debate about the correct interpretation.The Supreme Court of Wisconsin reviewed the case to clarify how the insurance policy should be interpreted and whether summary judgment was appropriate. The court held that, under the policy, losses caused by rainwater constitute an ensuing loss and are therefore covered despite the construction defect exclusion. It further ruled that the fungi additional coverage provision is an exception to the fungi exclusion, not a separate grant of coverage. The court concluded that genuine disputes of material fact exist regarding the existence and extent of construction defects and fungi damage, precluding summary judgment. The court affirmed the appellate decision reversing summary judgment and remanded the case for further proceedings, including reinstatement of the bad faith claim. View "Cincinnati Insurance Company v. Ropicky" on Justia Law

The dispute centers on two decisions by the Massachusetts Commissioner of Insurance regarding proposed statewide workers’ compensation insurance rates. The Workers’ Compensation Rating and Inspection Bureau of Massachusetts, the sole licensed rating organization for such insurance in the state, submitted rate filings for July 1, 2024, proposing a 7.6 percent decrease, and for July 1, 2025, proposing a 7.1 percent increase. The Commissioner disapproved the 2024 proposal, instead ordering a 14.6 percent decrease, and rejected the 2025 proposal, leaving the 2024 rates unchanged. Both decisions followed administrative hearings, with participation from the State Rating Bureau and the Attorney General.After the Commissioner’s 2024 decision, the Bureau sought review in the Supreme Judicial Court for Suffolk County, which was reserved and reported to the full Supreme Judicial Court of Massachusetts. The 2025 decision was similarly reviewed and consolidated with the earlier case. The Bureau’s main challenges were to the Commissioner’s use of a five-year data period for estimating indemnity paid losses (instead of the two years used historically), the methodology for calculating underwriting profit, and a change in data sources for a particular business classification (class code 9033).The Supreme Judicial Court of Massachusetts held that the Commissioner had reasonable support for disapproving the Bureau’s proposed rates, particularly due to the need to account for anomalous data from the COVID-19 pandemic. However, the Court found that the Commissioner failed to provide a reasoned explanation for ordering a specific 14.6 percent rate decrease in 2024 and for the methodology change for class code 9033. The Court affirmed the finding that the then-existing rates were excessive but remanded the case for the Commissioner to provide further explanation for both the rate decrease and the class code methodology. View "The Workers' Compensation Rating and Inspection Bureau of Massachusetts v. Commissioner of Insurance" on Justia Law

A young man was seriously injured in a car accident while riding as a passenger. His expenses exceeded the amount covered by the at-fault driver’s insurance. He held an underinsured motorist (UIM) policy through State Farm on his own car, and his family (parents and sister) held four additional State Farm policies insuring other household vehicles, all with similar UIM coverage. State Farm paid him the UIM limit under his personal policy and under one of the family’s household policies, but denied his request to collect UIM benefits (“stack”) from the remaining three household policies. State Farm relied on an anti-stacking provision in all policies, which limited recoveries to one policy “purchased by one insured.” The company argued that his parents, as joint purchasers, counted as “one insured,” so stacking across their jointly purchased household policies was not permitted.The Superior Court in Maricopa County granted summary judgment for State Farm, finding the anti-stacking language valid and applicable. The Arizona Court of Appeals affirmed the result but reasoned that the young man’s parents, although married, were two insureds, and the anti-stacking provision still applied because they jointly purchased the policies. The appeals court also rejected the argument that the sister was an additional purchaser due to her reimbursing a parent for premium payments.The Supreme Court of the State of Arizona reviewed the statutory interpretation at issue. It held that, under Arizona’s UM/UIM statute, “purchased by one insured” refers to the named insured or insureds who jointly procure coverage, regardless of who pays premiums or community property considerations. When multiple named insureds (such as spouses) act together to purchase policies, they are treated as “one insured,” and anti-stacking provisions may limit recoveries accordingly. The Supreme Court vacated part of the appellate decision and affirmed summary judgment for State Farm. View "STATE FARM v BALZAN" on Justia Law

After being injured in a car accident caused by Andrew Clark, who was driving a vehicle owned by his mother Tracy Clark, Nadia Marin sued Andrew for negligence and Tracy for negligent entrustment. Marin suffered multiple injuries and eventually was diagnosed with complex regional pain syndrome after undergoing extensive medical treatment and surgeries. Before trial, Marin made a $2 million offer of judgment, which the Clarks did not accept. At trial, the Clarks conceded liability, and the jury was left to determine damages, ultimately awarding Marin over $2 million.In the Eighth Judicial District Court, the Clarks challenged the outcome on several grounds. They argued that the court did not allocate enough trial time for their defense, improperly allowed Marin to withdraw deemed admissions, and issued an unsupported jury instruction. The Clarks also moved for a new trial on the basis of alleged attorney misconduct. The district court denied their motion for a new trial, upheld the jury verdict, and awarded Marin expert and attorney fees, including the full amount of her contingency fee agreement. The court also granted Marin’s motion to assign the Clarks’ claims against their insurer to her in execution of the judgment.The Supreme Court of Nevada reviewed the case and affirmed the trial court’s judgment, denial of a new trial, award of expert fees, and the assignment of the Clarks’ claims against their insurer. The court concluded that the Clarks had a meaningful opportunity to present their defense and that the district court had not abused its discretion regarding the deemed admissions, jury instructions, or expert fee award. However, the Supreme Court reversed the attorney fee award, holding that post-offer attorney fees under NRCP 68 must be limited to work performed after the offer of judgment, not the entire contingency fee. The court remanded for reconsideration of attorney fees consistent with this clarification and overruled prior precedent to the extent it was inconsistent. View "Clark v. Marin" on Justia Law

In this case, a trust was established by Frank Garrett, Jr. in South Dakota in 2006, naming his wife as the beneficiary and a South Dakota bank as trustee. The trust applied for and obtained a $10 million life insurance policy on Frank's life, funded by a nonrecourse premium finance loan. After several years, the policy was surrendered to the lender, which then sold the policy in the secondary market. Eventually, Viva Capital Trust acquired the policy, paid the premiums, and received the death benefit after Frank died in 2019. Frank’s estate, administered by his son, challenged the transaction, claiming it was part of a stranger-originated life insurance (STOLI) scheme, violating South Dakota’s insurable interest statute and public policy against wagering on human life.The Circuit Court of the Second Judicial Circuit, Minnehaha County, reviewed cross-motions for summary judgment. The court granted summary judgment to Viva, finding that the trust was validly established, the insurance policy was properly issued and delivered to the trust, and the policy complied with South Dakota insurable interest requirements. The court also determined that the estate’s counterclaims, challenging the trust’s validity and seeking recovery of death benefits, were barred by the statute of repose, which prohibits such actions more than one year after the settlor’s death. The court awarded litigation costs to Viva.On appeal, the Supreme Court of the State of South Dakota affirmed the circuit court’s grant of summary judgment to Viva, holding that the estate’s counterclaims regarding the trust’s validity were barred by the statute of repose, and that the insurance policy complied with South Dakota’s insurable interest statutes. The Supreme Court also found no error in denying summary judgment to the estate. However, it reversed in part the award of costs and remanded for further proceedings to ensure only authorized costs were included. View "Viva Capital Trust V. Garrett" on Justia Law